Hot stocks: One sell, two buy ideas for up to 8% returns

The first two sessions of the week belonged to bears while in the next two sessions the bulls retaliated to bring the benchmarks back in the positive terrain.

Nifty oscillated in the range of 11,800–12,000 and is trading with a change of 0.42 percent from the previous week’s close.

On the other hand, the Nifty Bank index too managed to cut the loses and is now trading with a gain of over 1 percent week-on-week.

Last Friday, there was a trend line breakdown in the Nifty spot along with the breach of the previous swing low of 11,935. This has resulted in a lower-top and lower-bottom formation on the daily chart, which indicates a change of trend in the short-term.

Then we saw that the index attracted buying near the support of 11,800 and bounced back. Later on, during yesterday’s pullback, Nifty failed to clear 12,000-mark, which is also the placement of the falling trend line on the daily chart.

Now, along with a lower-top and lower-bottom formation, we are also observing a negative crossover of 5-day exponential moving average and 20-day exponential moving average.

Thus, we maintain our sell-on-rise stance for positional trade. Until Nifty clears 12,100 on the upside, any bounce could be used to exit long positions or create shorts for trading bets.

For the immediate term, a move above 12,000 could pull the index higher but 12,100 would remain a critical hurdle. On the downside, 11,930 is the intermediate support. A move below the same might halt the ongoing recovery mode and the downside could resume, which can drag the index towards 11,800 or lower levels.

Traders are advised to remain stock-specific and follow strict stop-loss in case of long bets.